Significant upgrading work on the electricity and gas networks may not be completed before new independently-owned power generation stations are ready to produce electricity, the Commissioner for Electricity Regulation, Mr Tom Reeves, has signalled.
In a consultation document on the allocation of Bord Gais Eireann E) gas to groups proposing to build new power stations, Mr Reeves said "significant reinforcements" to the electricity and gas networks "are needed in order to bring any new significant generating capacity into commercial operation".
But the document added: "The leadtime for these system reinforcements generally exceeds the typical lead-time for the construction of new gas-fired generating stations."
This is likely to cause concern to groups proposing to build power stations, some of whom have expressed dissatisfaction at the pace of liberalisation in the market.
Such upgrading work was required on the electricity transmission system in Dublin - comprising a corridor from Co Kildare northwards - and to the gas transportation network outside the capital, Mr Reeves's document said.
In its absence, power stations will not be able to send electricity into the transmission network at their full capacity.
Mr Reeves's analysis was based on an assessment, carried out with the ESB's National Grid function and the Bord Gais transmission division, of the likely timing of connections between the energy networks and power stations.
The commissioner has also published comments received during a consultation process on his proposals to auction "virtual capacity" on the ESB network. This "virtual market" will enable groups proposing to build power plants to gain access to the newly liberalised market.
As previously reported in The Irish Times, however, it is clear that many of these groups are unhappy with the reserve auction price proposed by the ESB. This has been vigorously defended by the ESB.
In publishing comments from nine parties, which included the Department of Public Enterprise and several electricity groups, Mr Reeves said the views did not necessarily reflect his opinion.
Nevertheless, the document was critical of the "very high" proposed reserve price, stating that it suggested a "lack of faith" in the auction process. "The prices are too high overall and too heavily weighted towards capacity as against energy," it said.
On the allocation of gas capacity, the commissioner has already said he expects this to be finalised next July. The allocation, on a "first-to-commission" basis, is necessary because the existing gas interconnector with Scotland has capacity to supply only about three new power stations.
While prospective market entrants have said it will be difficult to establish who is "first-to-commission", Mr Reeves has now published his proposals for allocation.
Applications will be ranked in order, "as estimated where considered appropriate by the commissioner".
Groups proposing to build the power plants will be required to submit forecast or achieved milestone dates for their projects, with supporting evidence.
The date of commissioning will be defined as the date by which a station is connected to the natural gas network and to the electricity transmission system and "operates reliably" to its generating capacity. Mr Reeves added that work must be completed and the risk of loss or damage to the station must have passed from the construction contractor to the applicant. He will use milestone dates specified by applicants to monitor progress towards commissioning.
